SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1937
For the transition period from to February 29, 2000 to March 31, 2000
Commission file number: 0-28465
CIK No. 0001098331
INTERSPACE ENTERPRISES, INC.
(Exact name of registrant as specified in this charter)
Colorado 84-1283938
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(State of other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
7825 Fay Avenue, #200, La Jolla, California 92037
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(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (858)456-3539
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to the filing
requirements for at least the past 90 days.
YES X NO
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As of March 31, 2000, there were 7,340,200 shares of $0.00001 par value common
stock outstanding
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INTERSPACE ENTERPRISES, INC.
(A Development Stage Company)
Balance Sheet (Unaudited)
As of March 31, 2000
Current Assets
Cash $ 131,808
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Total current assets 131,808
Fixed Assets
Computer and office equipment 9,299
Accumulated depreciation (2,460)
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Total fixed assets 6,839
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TOTAL ASSETS $ 138,647
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LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities
Accounts payable $ 170,992
Accrued payroll liabilities 130,505
Accrued liabilities 800
Note Payable 16,000
Current portion long term liabilities 706
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Total current liabilities 319,003
Long Term Liabilities 2,080
Common stock, $.00001 par value, 200,000,000 shares
authorized, 7,340,200 shares issued and outstanding 74
Accounts receivable subscribed (1,231,250)
Additional paid in capital 2,345,916
Accumulated deficit - during development stage (1,297,176)
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Total stockholders' equity (182,436)
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 138,647
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SEE ACCOMPANYING NOTES
INTERSPACE ENTERPRISES, INC.
(A Development Stage Company)
Statement of Operations (Unaudited)
For the Three Months Ended March 31, 2000
Cumulative from
January 1, 1998
(Inception of the
For the Three Development
Months Ended Stage) to
March 31, March 31,
REVENUES 2000 2000
Sales $ - $ -
Interest income - 36
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Total Revenue - 36
RESEARCH AND DEVELOPMENT 5,059
ADMINISTRATIVE AND SELLING EXPENSES
Consulting 126,000 199,575
Depreciation and amortization 492 2,460
Legal and professional 35,357 186,673
License fees 333,000 373,000
Marketing and promotion 11,306 96,469
Office expense 6,368 41,567
Other administrative expenses 16,275 72,198
Rent 834 5,880
Salaries 84,799 320,306
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Total 614,431 1,298,128
OTHER INCOME
Note Payable Forgiveness - (7,575)
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Net loss before tax (614,431) (1,295,576)
INCOME TAXES
State income tax - 1,600
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Net loss $ (614,431) $(1,297,176)
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SEE ACCOMPANYING NOTES
INTERSPACE ENTERPRISES, INC.
(A Development Stage Company)
Statement of Changes in Stockholders' Equity (Unaudited)
For the Three Months Ended March 31, 2000
Preferred Stock Common Stock Additional Paid Accounts Rec Accumulated
Description Shares Dollars Shares Dollars in Capital Subscribed Deficit Total
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Balance December 31, 1999 - - 4,672,200 $ 47 $ 449,193 $ (5,000) $ (682,745) $ (238,505)
Shares issued for cash 2,199,000 $ 22 $1,427,728 $ (1,226,250) $ 201,500
Shares issued for services 469,000 $ 5 $ 468,995 $ 469,000
Net loss $ (614,431) $ (614,431)
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Balance March 31, 2000 - - 7,340,200 74 2,345,916 (1,231,250) (1,297,176) (182,436)
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SEE ACCOMPANYING NOTES
INTERSPACE ENTERPRISES, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited financial statements include the accounts of
InterSpace Enterprises, Inc. (the "Company"). The financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles.
On April 17, 2000, the Company completed a merger with its parent company. The
accompanying unaudited financial statements have been restated to reflect the
effect of the merger from the beginning of the fiscal year. The cumulative
figures also represent the aggregate figures of both companies since inception.
In the opinion of management, the unaudited interim financial statements for the
period ended March 31, 2000 are presented on a basis consistent with the audited
financial statements and reflect all adjustments, consisting only of normal
recurring accruals, necessary for fair presentation of the results of such
period.
The results for the three months ended March 31, 2000 are not necessarily
indicative of the results of operations for the full year. These financial
statements and related footnotes should be read in conjunction with the
financial statements and footnotes thereto included in the Company's financial
statements of the period ended August 31, 1999.
NOTE 2 - RELATED PARTY TRANSACTIONS
On March 31, 2000, the Company received loans, in the form of notes payable,
from stockholders in the amount of $16,000. The notes payable are due September
30, 2000, with interest accruing at 10%.
NOTE 3 - SUBSEQUENT EVENTS
On April 17, 2000, the Company completed a statutory merger of the Parent,
InterSpace Enterprises, Inc., a Delaware corporation, and its wholly owned
subsidiary, Marathon Marketing Corp., a Colorado corporation, with Marathon
Marketing Corp. being the survivor, but changing its name to InterSpace
Enterprises, Inc. The merger was completed via a share-for-share exchange, with
all acquired shares being retired by virtue of the merger.
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2000 COMPARED
TO THE SAME PERIOD IN 1999.
The Company continued development of its business model during the quarter
ended March 31, 2000, thus no revenues were achieved. The Company incurred
operating expenses for the three month period of $132,234 in 1999 compared to
$614,431 in the same period in 2000. The Company recorded a net operating loss
of $(132,234) for the 1999 period as compared to ($614,431) for the same period
in fiscal year 2000.
The Company losses will continue until business and profitable operations
are achieved. While the Company is seeking capital sources for investment, there
is no assurance that capital sources can be found. The loss per share for the
1999 fiscal quarter was ($0.03) compared to ($0.08) in the fiscal quarter of
2000.
LIQUIDITY AND CAPITAL RESOURCES
The Company had cash capital of $131,808 and $6,839 in fixed assets for
total assets of $138,647 at the end of the period. The Company will be forced to
make private placements of stock in order to fund operations continuance. No
assurance exists as to the ability to make private placements of stock. At March
31, 2000, it had no accounts receivable. The Company has current liabilities of
$319,003 which exceed current assets by approximately $180,356.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings - None.
Item 2. Changes in securities - None.
Item 3. Defaults upon senior securities - None.
Item 4. Submission of matters to a vote of security holders - None.
Item 5. Other information - None.
Item 6. Exhibits and reports on Form 8-K
(a) The following are filed as Exhibits to this
Quarterly Report. The numbers refer to the Exhibit Table of
Item 601 of Regulation S-K:
None.
(b) Reports on Form 8-K filed during the three months
ended March 31, 2000. (incorporated by reference)
None.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf of the
undersigned thereunto duly authorized.
Dated: June 28, 2000
INTERSPACE ENTERPRISES, INC.
by:/s/Daniel P. Murphy
President